NFX

[dan_s]

You should buy Newfield Exploration (NFX) on this morning's dip. You can find our profile on the company under the Sweet 16 tab.

[jb2257]

Do you know why it's down? I was looking for some news but couldn't find any.

[Lemonhawk]

Insider Selling?

Insider Selling: Newfield Exploration COO Sells 35,000 Shares of Stock (NFX)

http://www.intercooleronline.com/stocks ... nfx/73424/

[dan_s]

There was a large block trade at the open. Probably a fund that needed to sell or thought they had a better idea. Decision to sell at the open may have been motivated by drop in oil prices on Tuesday. Hard to read the mind of some fund managers. Many of them do not base their trades on fundamentals.

Try not to read too much into insider selling. Many times those are options related and the sale is necessary to pay taxes.

NFX is going to report a strong 3rd quarter and I think they will announce a buyer for their China assets before year-end. I moved it to the Sweet 16 because of their STACK play in Oklahoma. See our recent profile and you will see why. NFX is in transition. By year-end they will have a VERY STRONG balance sheet and VERY STRONG cash flow per share. Operating cash flow per share should be approximately $12/share in 2015.

[dan_s]

I just posted an updated forecast model for NFX under the Sweet 16 tab. My Fair Value Estimate is $54.25/share, compared to First Call's Price Target of $49.06. It is important to note that my valuation is just 5X CFPS. That is a very low multiple for a company with this much running room. It will be interesting to see how the market reacts to their presentation tomorrow morning. - Dan

Newfield Exploration Company (NFX) is scheduled to present at the following events:

Barclays Capital CEO Energy-Power Conference *
9:05 a.m. (Eastern), September 4, 2014

UBS Houston Energy Bus-less Tour *
10:00 a.m. (Central), September 17, 2014

*A live webcast of the presentation will be made available through Newfield's website at http://www.newfield.com.

[dan_s]

I still think Wall Street views NFX as a "gasser". Based on my forecast model, less than 22% of 2015 revenues will be from the sale of natural gas. STACK is an oil play.